This article argues that the success of international strategic alliances requires attention not only to the hard side of alliance management but, also, to the soft side. This study shows how the dynamics of trust and commitment – major components of social capital- affect the performance of international strategic alliances. This presentation answers : What does trust mean in international strategic alliance? What does commitment mean in international strategic alliance ? Why are trust and commitment important for international strategic alliance ? How do alliances build trust and commitment? How do trust and commitment affect alliance’s performance according to this study? How can we apply this study on the business future ?

1. Success Through Commitment and Trust: The Soft Side of Strategic Alliance Management
The article by: John B. Cullen, Jean L. Johnson, and Tomoaki Sakano
10.09.2013

2. This article argues that the success of international strategic
alliances requires attention not only to the hard
side of alliance management but, also, to the soft side.

3. Soft side of strategic alliance
Hard side of
strategic
alliance
Hard side of strategic alliance like
financial and other operational issues
Soft side of strategic alliance like the
development and management of
relationship capital in the alliance
Essential part of soft side contains trust
and commitment

4. Trust and commitment
This study shows how the dynamics of trust and commitment –
major components of social capital- affect the performance of
international strategic alliances.

5. What does trust mean in international strategic
alliance?
The partner’s behaviors toward the alliance and the another partner.
Trust
Credibility trust ( rational side)
 ability to meet their obligations and other promised contributions
Benevolent trust ( emotional side)
 intention to behave good toward the partner and the alliance

6. What does commitment mean in international strategic
alliance ?
commitment in an international strategic alliance concerns a partner’s
intention to continue in a relationship and if a partner intends to continue
in the relationship and put effort for maintaining the alliance.
Commitment
Instrumental commitment (rational side)
Entering the alliance to gain economic reward, and there must be
mutual positive benefit.
 Managers should see the benefit they gain and return within the
alliance.
Attitudinal commitment (emotional side)
 intention to take care of the alliance and support it by pushing
extra effort in it, plus being willing to go beyond contractual
obligations
 dedicating the resources and expertise for the alliance

7. Why are trust and commitment important for international strategic alliance ?
 Formal contract doesn’t contain all the details and can’t anticipate every change in the
future. social fabric fills the gap in the formal contract
 Businesses differ in their strategic goals , their objectives, their organizational cultures,
their expertise, and so on. Without mutual commitment, the managers can fail to work out the
problems
 Unequal exchange in the alliance because of going beyond the contractual obligations from
one side. So mutual commitment and strong norms of reciprocity make the gaining and
contribution equal.
 Successful alliance needs quality in the contribution , so without trust, the partners will
hold back information or get unfair advantages from each other.
Learning is one of the major motivates for strategic alliance, and sharing sensitive
information and knowledge imbedded in the organization, they must work closely.
Without trust and commitment this is often not possible

8. Example of international strategic alliance.
United R&D to produce the next
generation of computer chips
Withdrawal of the Japanese
Lack of trust
Germans, and Americans into
their own teams
The results
Perhaps held back information
and didn’t share ideas.

9. Japan USA Germany
 The Japanese found it difficult
to work in small isolated offices.
 The Germans were horrified that
Japanese slept in meetings when a topic
did not concern them.
 The Americans complained that
the Germans planned too much
and were slowing things down
PLUS
 Difficulties with communication in English.
 Differences in management styles.
 Lack of sufficient cross-cultural training

10. Credibility trust
Benevolent trust
Instrumental commitment
Attitudinal commitment
How do alliances build trust and commitment?
Firm managers develop beliefs about their partner’s reliability
and delivery on expectations in alliance activities
Developing beliefs that the partner firm will act with good
intentions and will not harm them.
Credibility and benevolence lead to the instrumental
dimension of commitment.
Attitudinal commitment, the more emotional side, is the
more evolved form of commitment and may take longer to
develop. attitudinal commitment develops out of both
dimensions of trust
So here we realize that trust provides a foundation for commitment,
and these components have a positive relationship.
The development

11. Credibility trust
Instrumental
commitment
Attitudinal
commitment
Benevolent trust
Relationship
Capital
Performance
Reinforcment
How do trust and commitment affect alliance’s performance according
to this study?
The performance can be: Learning a new market, gaining a new technology, and learning new business practices plus
traditional financial dimensions of performance

12. How can we apply this study on the business future ?
Choose your partner with trust in mind which means the partner should be convincing
for you that you think he can involve moer than potential strategic complementary and
resources contributions.
You must evaluate the level of benifit you will gain from the alliance and give it the
proper trust and commitment
 you have to understand the partner’s behaviors and interactions in order to build your
level of trust and commitment.

13. Thank you